The EU said a cooperation agreement signed in Beijing "opens the way for China to take a substantial financial part in the programme through a stakeholding in the Galileo Joint Undertaking" (JU).

The Galileo JU is a joint venture between the EU and the European Space Agency.

More immediately, China will cooperate with the EU on satellite navigation through joint work on research and development, manufacturing and technical aspects of the Galileo project such as radio frequencies.

"China will help Galileo to become the major world infrastructure for the growing market for location services," said EU Transport Commissioner Loyola de Palacio.

A European Commission statement quoted Chinese Science and Technology Minister Xu Guanhua as saying that "China supports Galileo and plans to participate actively in its construction and application for mutual benefits".

The agreement was initialled in Beijing Thursday and after its formal adoption by EU member states and the Chinese government in the coming weeks, it is due to be signed at an EU-China summit on October 30.

Galileo, scheduled to be operational by 2008, is designed to encircle the globe with 30 satellites in medium Earth orbit, comprising 27 operational satellites and three reserves, plus two control centres on the ground.

It should provide users, ranging from aircraft and shipping to cars and trekkers, with a navigational fix accurate to within just one metrefeet).

At present, the only global satellite navigation system available to civilians is GPS, but it is accurate only to 100 metres (325 feet) for civilians, or 22 metres (71 feet) for the military, and is under the control of the Pentagon.

Galileo's total development and launch costs are put at around 3.2-3.3 billion euros (3.6-3.7 billion dollars), with initial running costs from 2008 onwards of around 220 million euros a year.

SPACE.WIRE